China hopes for solution to EU shoes spat
(Reuters/Bloomberg)
Updated: 2006-02-21 18:58

'Major Loophole'

While the National Association of Italian Shoemakers welcomed the planned duties, failing to include all types of shoes is a "major loophole," said Leonardo Soana, president of the lobby. "This may reduce the effectiveness of the measures that will be introduced," he said.

In January, the EU decided that none of the Chinese or Vietnamese manufacturers involved in the case could claim they operate according to international business norms. By denying the makers "market-economy status," the commission won't rely on Chinese and Vietnamese data when calculating costs and whether sales were below market prices.

The duties would "have a serious impact on the export of Vietnamese shoes to the EU," said Do Thanh Hong, a vice chairman of the Vietnam Leather and Footwear Association. "Importers will buy shoes from countries that have lower prices, for example, Indonesia."

'Social Problems'

Vietnam's trade ministry wrote to the commission in December asking for an end to the probe, which began last July. The Leather and Footwear Association says Vietnam's footwear industry employs more than 500,000 people and imposing anti-dumping duties would damage the Vietnamese economy and cause "social problems."

In contrast to China's threatened retaliation, Vietnamese Deputy Foreign Minister Le Van Bang said last month during a visit to Brussels that his country is looking for a compromise to the anti-dumping duties on its shoe exports to the EU.

China makes 8 billion pairs of shoes a year, according to the country's commerce ministry. Guangdong Province, the center of China's shoe manufacturing, accounted for about half of that production in 2004 and exported 2.5 billion pairs.

Vietnamese shoe companies are beginning to shift their focus to the U.S. market, largely due to the impact the EU's anti-dumping case is having on exports to Europe, Sai Gon Giai Phong newspaper reported last month.